THE year-on-year pace of UK growth in the second quarter has been revised down from 1.7 per cent to an even further below-trend 1.5 per cent by the Office for National Statistics.
Quarter-on-quarter growth in the three months to June was confirmed at just 0.3 per cent. The weak gross domestic product data, published yesterday, raised doubts in financial markets about whether the Bank of England would feel able to raise UK base rates from a record low of 0.25 per cent at its November 2 meeting. A Bank statement after the Monetary Policy Committee’s September 14 meeting fuelled expectations of a November rise.
Chris Williamson, chief business economist at IHS Markit, said yesterday: “From a recent historical perspective, since the Bank’s independence [in 1997], it would be unprecedented for the central bank to tighten policy with the data pointing to such anaemic economic growth.
“However, policymakers continue to fuel expectations interest rates will rise soon in response to higher-than-expected inflation.”
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